Sterling's sharp fall raising concerns over the return of inflation to the UK economy. Bank of England governor Mark Carney said recently at a economic forum in the British city of Birmingham that the bank would tolerate slightly higher inflation than its formal target if necessary, but said the bank is not indifferent to the level of sterling and there was no 'magic number'.

"The exchange does matter for inflation. Changes in the exchange do have impact on inflation over a period of time and it tends to extend out to about two or three years out so we do take it into account when setting monetary policy we do take it into account with all other factors that influence inflation, so we are not indifferent to the level we are not going to target the level, we are not going to have some magic number for it and it does factor into thinking and it does factor into out thinking as we are striking that right balance, in a period of adjustment and this economy is undergoing it has just started a period of major adjustment and what we all want is to make this as successful as possible and so that requires access to credit it requires a degree of monetary stimulus but that has to be balanced with ensuring that inflation is low stable and predictable." Mark Carney,Bank of England Governor.

Mark Carney's comments were made during a series of public meetings held by BoE officials to explain the work of the central bank. Exactly what the Bank of England intends to do about rising inflation was one of key questions asked during the interactive economic discussion in Birmingham.

His comments were considered to give a brief boost to the battered pound which has slumped about 20 percent in value since the Brexit vote in June. Many analysts have warned the squeeze on British households could be considerable.

British prime minister Theresa May took the unusual step last week of highlighting the "bad side-effects" for savers of the BoE's near-zero rates and said a change had to come.